Pending Homes Sales Index is down

Today I got several report from reliable sources (NAR, FAR and Realtor.org) that the pending home sales index was significantly down from October 2009 to November 2009.

Pending home sales are Down

As most of us know the pending home sales index is an excellent indicator often used to forecast future real estate activity in a market or even nationally.  The idea is that the higher this index the lower the inventory will be in the next 30 to 60 days and we all know that the lower the inventory the more likely prices are to increase.  Well the same can be said for the reverse; that is to say the lower this index the less homes can be expected to close and if sellers continue to place properties on the market then inventory should increase and prices drop.  With that said the November 2009 pending home sale index dropped by 16% from October 2009; however, this may be very misleading.  The reality is that there was one big factor that was more than likely artificially increasing the index in November 2009.  That factor was the tax credit expiration.

I believe that buyers were rushing to the market in order to make their purchase in time and benefit from the economic relief program consisting of the tax credit.  However, the extension of the tax credit may have simply alleviated the pressure of  the rush and therefore deflated the pending home sales index.

When we look at additional data we find that the pending home sales index actaully went up significantly form November 2008 to November 2009, this is more like comparing apples to apples.  In this case the index rose 15%, according to data gathered and received from realty times.com. This is a clear indication that the marker was certainly headed in a better direction in 2009 over 2008 and I believe that 2010 will be better than 2009.

In addition, prices have been creeping up in most major metropolitan areas.

For a complete property search be sure to log on to www.arealtyteam.com

The Rental Process in Miami

MiamiRentSeekers.com is the place to find your next home in South Florida

The Rental Process in Miami… As our previous blog indicated Miami has generated a tremendous rental market in recent years. With that said I decided to provide a quick little outline of how the rental deal should go:

A. Locate a real estate agent which specializes and is familiar with the rental process. Pick an agent.

MiamiRentSeekers.com is the place to find your next home in South Florida

B. Give the agent your search criteria. (this would include area desired, size of unit desired, do you have any pets, price range and any other information you would require in your unit – for example “washer and dryer in the unit is a must for me”)

C. Your agent will do the research and set up appointments to view units. (perspective tenants usually find a unit within 4 to 5 choices, but this number may vary depending on how specific the search criteria, the more specific the less units to view; for example someone with a large dog would not have as many choices as someone with no pets)

D. Once you have identified a unit you would like; a “contract to lease” also know as an “offer” should be filled out and a good faith deposit should be placed in an attorney’s or broker’s escrow account.  This offer will depict all of the offering terms inclusive of rental rate, term of lease, move in date, any work to be done on unit prior to move in, maintenance resposibilities, deposits expected to be paid and all time frames, etc.

E. This offer will be presented to the landlord or the landlord’s representation.  the landlord will either accept or counter or reject the offer.  If a counter is made then the tenant has the right to either walk away from the offer and move on or accept the counter or even go to the extent to re-counter the offer.  There is no limit on how many times the offer may go back and forth but usually it is an offer – counter and then acceptance.

F. Once ALL terms are agreed to the licensee will draft the actaul lease agreement and should review with the perspective tenant for signature and then present to landlord or landlord’s representation for landlord’s signature. At this point we have a lease in place to commence at a future date.  All remaining deposits and move in funds should then be placed into the same escrow account as per lease agreement.

G. If you are moving into a condo or HOA property you will then proceed to the applicaiton process (keep in mind that the entire deal will be contingent on your getting approved by the association although you must excercise deligence in the application process as  indicated by the original offer).  Your real estate professional should be familiar with the process and be able to guide you easily.  All associations are different. Here is a sample application.

H. Once you are approved it is time to wait for your move in date.  Now it is up to the tenant to have utilities in order as well as movers.  Also, do not forget that if you are moving into a building you will more than likely need to make an elevator reservation so that your movers dont have any issues bringing in your belongings.

I. At the end of your lease term you will more than likely be contacted by your real estate professional to see if you wish to renew your lease for an additional term or if you wish to vacate the property.  Once again your real estate professional should be able to guide you with the process.

I hope that this helps anyone looking to rent a unit in MIAMI. Please view our Renter’s Guide for some helpful tips.

Isela Gonzalez
Miami Rent Seekers

Smart investors are making their move into real estate…..NOW!!

Well, it looks like reports are coming in from all over reputable resources (from the National Association of Realtors to local boards to private reports such as Realty Times) that the real estate market has a positive outlook for 2010.  These report apply to mainly residential real estate; however, there is one particular sector that I have noticed pick ing up speed in our brokerage and decided to do a bit of research on it.  That sector is the real estate investor.  I am speaking here about your average investor, the “average joe” not you huge developer.  I mean lets face it the formula is pretty simple and it goes something like this:

HIGH INVENTORY + AFFORDABLE PRICING + LOW INTEREST RATES = OPPORTUNITY

Now it would be easy to simply leave it at that but I prefer to look at the hard data, from reputable sources.

According to move.com just over 12% of buyers are looking at purchasing an investment property.  Furthermore they state that 25% of homebuyers are targeting foreclosures, and of that number 42% regard their purcahse as an investment.  These numbers are pretty impressive compared to the past two and even three years.

In addition, in 2010 we are much clearer on exactly what the government is willing to do or not do in order to prevent additional decay in the financial system.  The extension of the tax credit has most certainly helped and also the inclusion of non-first time home buyers to be eligible for the tax credit has increaed the pool of potential buyers.  In short there are more buyers out their that will soon match the inventory levels.

In addition, we are seeing reports daily that consumer confidence is on the rise.

Now, I most certainly do not believe that we are headed for another real estate BOOM similar to the one in the mid 2000’s (and I for one would hope that that would not be the case), but I do believe that we are headed for a much more stable market, a much more equal playing field for buyers and sellers.

So buyers if you are on the fence, now is the time to dive deep into your research.  Look at trends, watch the market!

For your complete property search with no obligation log on to www.arealtyteam.com

South Florida Brokers & Associates, Inc.

Why use a realtor or real estate agent for a rental?

Get yourself a Professional Realtor

There is no doubt in anyone’s mind that Miami has generated a tremendous real estate rental market in recent years.  The fact is that the real estate boom of years past created many real estate investors hungry for qualified tenants to fill their properties. These investors range from the individual dabbling in real estate all the way up the spectrum to your complete real estate developer.  This fact coupled with the fact that the recent down turn in the economy left many folks (unfortunately) losing their homes. Now take the people that have lost their homes (who normally would not have rented) and add them to the rental pool of tenants along with those that would normally rent anyway for other reasons and you have a larger pool of tenants to match the larger pool of rental inventory.

But still; why on Earth would you need a real estate professional to assist with a rental.Well, the reality is that there are several reasons for both landlords and perspective tenants to utilize a professional.

Lets start with the tenant:

With such a large inventory where would you even start? You cant just walk in to a building and ask the concierge what is available for rent. You may decide to visit craigslist or backpage but oh my godness that really didn’t narrow it down with about a 1000 posts going in daily. The newspaper is another option…. or really is it?  In the information age the newspaper is way too slow by the time the add prints the unit is gone, again a frustrating waste of time!! So what to do?  That’s right; your Realtor will be able to simply log onto the MLS and view what is available in real time based on your criteria, that’s right REAL TIME! OK, so you may not want to speak to someone who is going to be pushy and try to get you to come in so they could eventually …..  earn that commission.  OK, got a solution for that as well, log on to a good Realtor website, I recommend one that does not insist that you register first, one that truly gives you FREE information with no catches, that is unless you just absolutely cant live without more junk email.  Try Miami Rent Seekers this site will allow you to browse all available inventory on the MLS. Yes, I said the MLS, this information is provided to the public through a system called IDX which in layman’s terms just means it is syndicating the MLS for public view.  You will be able to see ALL listings, not just the ones listed by that agency but ALL listings from ALL brokerages in the area! WOW!

Now, just pick an agent you feel you want to work with.

Your new agent and best friend (that is at least until you happily move in) will show you the properties that you are interested in, draft up the offer you want to make, prepare – review and explain the lease agreement and any addednums, guide you through any condo board or HOA application process, provide any local information you may require and assist you with your move in inspection.

Now how much will all this cost you????  You will get this for the bargain price of FREE!!! That is right free, the landlord actually pays his broker who in turn pays your broker, you pay nothing for the services.

Well, your next questions is probably – “well, wouldn’t I get a better deal if I deal directly with the owner?”  To that I would say, “No, the owner will much more than likely (because of the benefits they receive) have listed the property with his broker, so at the end you will find yourself dealing with a broker, except this broker represents the landlord.  Wouldn’t you like to have someone looking out for you?

So why would you use a broker if you have a property to rent out, you are the landlord?

These benefits are plenty.  Number one is TIME.  Do you have the time to run out and show the property every time someone calls or expresses an interest? What about MONEY? Do you want to pay advertisement to get the perspective tenants interest in the property you have available? What about EXPERTISE? Are you familiar with leases and addendums and the condo board process? What about the fact that your property will simply not be on the MLS if you are not listed with a broker? What about the monthly relationship with your new tenant? Did you know that many brokers offer property management services? What about the combination of TIME and MONEY, that is to say the faster I rent out the property the faster I collect more money!

In conclusion, in this great rental market the way to go is to use a Realtor and you will find the process much less frustrating and more enjoyable.

South Florida Brokers & Associates, Inc.
MiamiRentSeekers.com

New Fannie Mae Loan Guidelines

OK, so you found your dream home and you have 20% of the purchase price to put down, plus you dont need any seller contribution for closing as you also have that money set aside. Your dream home is listed under market value and will easily appraise, it isnt a short sale and it isnt a foreclosure; just an old fashioned GOOD DEAL. This should be a breeze, you simply apply for a loan and wait for your approval and then go to the closing table.  Oh, wait a minute may not be exactly that simple.

The new Fannie mae loan guidelines may affect you.  Effective today (December 15, 2009) you credit score will play a much bigger roll that in the past.  Effective immediately the new required credit score needs to be at a minimum of 620; this is a drastic increase in credit requirement from the previous 580 score requirement. In addition to the stricter credit requirement Fannie Mae is also concerned with you current obligations. In other words, a maximum of 45% of your income can go toward current debt or obligations.  These obligations would include debts such as car payments, credit cards payments, and other loans.  Add to this that fact that if you are purchasing a condo there will be a condo questionaire which will depict condo maintenance dues delinquecy rates and forclosure rates in the building; this will also be taken into consideration when the lender is evaluating the risk involved with your loan.

It is expected that most banks will adopt the new higher standards imposed by Fannie Mae; considering that Fannie Mae buys loans from lenders inturn providing needed financing to these institutions.

If you are in the market to buy a home some good steps to take are: lowering currect debt, do not open additional accounts, and do not make any other major purchases (ie, a vehicle).

Also, it is a great idea to keep an eye on your credit score.  One good website to use is annualcreditreport.com , there is a small fee associated witht the complete report, but if you are in the market for a purchase it is well worth it.

For a complete property search log on to arealtyteam.com

Foreclosure Filings Fall 8% (But what does this really mean?)

The Florida Association of Realtors recently reported in an industry e-mailed news letter that the number of homeowers falling into foreclosure dropped for a fourth consecutive month in November.  The update goes on to point out that millions of Americans are still being considered for Barack Obama’s foreclosure prevention program.

This actaully leads me to believe that the drop in foreclosure filings may not be an indicator that we are actually seeing a turn around. My question would is how many of these “millions” being considered will fall short ofthe requirements to enter into the administrations program? Could we be looking at forclosures coming out inh the future, could be be penting up the foreclosure that well later be unleashed on the market.

I have many buyers which are n the market to invest and this questions comes up often. Basically, it goes like this “… do you think that the worst is behind us or do you think it will get worse…?”

Well, I guess the answer is a bit of both.  Keep in mind that the market is local; therefore, looking at state or national data only gives you a broad view. You really need to focus locally. If we look closely at the stats, we find that yes foreclosures are going down for four consecutive months (this is good right), well not really not when you compare it to a year ago same month.  I believe if you do this you will find that they are between 15% and 20% higher this year than a year ago. The anser is to go local.

Your real estate professional will be able to pull the most recent comparables, they will be able to search public records for additional foreclosures, they should also be able to check with the homeowner’s association and with a condo board for the status of the property you may be considering.  You are going to want to gauge the possibility of more units going into foreclosure.

The bottom line is if you are in the market to buy, this is indeed a great time to buy; with low interest rates, properties prices well below market and an abundance of inventory to sift through. But be sure to associate yourself with a local, knowledgable real estate professional that will dig up the real scoop on your property of interest. For properties in South Floirda start your search HERE.